Samsung's Marketing Strategy: Product and Market Analysis
This paper examines the key components of Samsung's marketing strategy that helped the company achieve strong profitability during a period of declining global smartphone sales. Drawing on the Ansoff growth matrix framework, the analysis covers Samsung's use of product diversification through the Galaxy S7 launch, product development efforts targeting diverse customer segments, and market penetration tactics in both mid-to-low-end and high-end segments. The paper also identifies a gap in Samsung's approach — the absence of a market development strategy — and suggests this as an area for competitive improvement. The discussion highlights how strategic marketing management can sustain growth even in a saturated, highly competitive industry.
- Introduction: Samsung in a Competitive Smartphone Market: Samsung's profitability amid declining smartphone industry sales
- Product Diversification and the Galaxy S7 Launch: Galaxy S7 launch as a product diversification move
- Product Development Strategy: Developing curved and flat Galaxy S7 for different segments
- Market Penetration and High-End Dominance: Penetrating mid-to-low and high-end markets with existing products
- Conclusion: Gaps and Opportunities in Samsung's Strategy: Missing market development strategy and future recommendations
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What makes this paper effective
- Grounds its analysis in a real-world performance outcome — Samsung's record quarterly results in mid-2016 — which gives the argument immediate credibility and relevance.
- Applies a clear marketing management framework (product diversification, product development, market penetration) consistently across each section, keeping the paper focused and organized.
- Ends with a critical observation: Samsung's strategy lacks a market development component, demonstrating analytical independence rather than simply describing what the company did.
Key academic technique demonstrated
The paper uses a framework-driven analysis, mapping Samsung's real business decisions onto standard marketing strategy concepts (drawn from Upadhyaya, 2015). This technique — defining a concept, then applying it to a specific case with evidence — is a reliable structure for business and marketing essays at the undergraduate level.
Structure breakdown
The paper opens with industry context and Samsung's financial performance, then moves through three strategy components in separate paragraphs (diversification, product development, market penetration). It closes by identifying a strategic gap — market development — and recommending it as an area for improvement. This problem-analysis-recommendation arc is a standard and effective structure for applied business writing.
Introduction: Samsung in a Competitive Smartphone Market
Marketing management is an important component for the success and profitability of a company in its respective industry or market. Samsung, a South Korean conglomerate, has faced intense competition from Apple and other smartphone companies across the globe. Since 2014, Samsung's profit and market share declined significantly due to intense competition from Apple and Chinese players. However, Samsung experienced a turnaround in profitability over the following years through the adoption of new strategies.
According to Jung-a (2016), Samsung Electronics predicted its best quarterly results in over two years as of June 2016. The company experienced increased profitability at a time when the smartphone industry was characterized by declining sales. While Apple, LG Electronics, and Chinese players struggled to cope with decreased demand for smartphones, Samsung enjoyed high operating profit margins estimated at $7 billion for the June 2016 quarter (Jung-a, 2016).
Product Diversification and the Galaxy S7 Launch
The profitability and increased market share Samsung achieved during this period are attributable to the development and use of a new phone strategy. This marketing strategy contributed to increased sales at a time when other competitors experienced slowing demand. One key component of Samsung's marketing strategy is product diversification. Product diversification entails adding new products to a range of existing ones, or altering existing products to enhance market share (Upadhyaya, 2015).
For Samsung, this strategy involved launching the Galaxy S7 — a simpler flagship smartphone designed to help the firm reduce costs at a time when global smartphone sales growth was declining. This new product was added to Samsung's existing range and played a crucial role in its increased profitability, as 16 million units were shipped in the second quarter of 2016. The Galaxy S7 also incorporated several differentiating features, including a curved-edge design and convenient capabilities such as water and dust resistance, wireless charging, and longer battery life (Tanner, 2016).
Product Development Strategy
The second component of Samsung's phone strategy is product development, which entails creating new products for existing markets by examining how to meet customers' needs more efficiently and outperform rivals (Upadhyaya, 2015). Samsung introduced the Galaxy S7 as a streamlined product designed to meet evolving customer needs and preferences while outperforming Apple and other competitors. The company developed both curved-screen and flat-screen versions of the Galaxy S7, targeting different customer segments.
In addition to introducing the Galaxy S7, Samsung's product development strategy involved streamlining its overall product offerings rather than simply rolling out a large number of smartphone models, as it had done in the past. This more focused approach allowed the company to concentrate resources on high-impact devices.
Conclusion: Gaps and Opportunities in Samsung's Strategy
Samsung's phone strategy does not incorporate market development initiatives, which involves identifying new markets for existing products. Given the recent decline in growth of this sector, Samsung has primarily focused on increasing its market share and profitability in existing markets through new and existing products. The company could benefit from identifying new markets for existing products in order to enhance its competitive advantage.
References
Jung-a, S. (2016, July 12). Samsung gets smarter with phones strategy. Financial Times. Retrieved April 7, 2017, from https://www.ft.com/content/35cb2a08-44f0-11e6-864d-01c0167ff470
Tanner, P. (2016, March 11). What is Samsung's growth strategy in the smartphone market? Retrieved April 7, 2017, from http://marketrealist.com/2016/03/samsungs-growth-strategy-smartphone-market/
Upadhyaya, M. (2015). Marketing management: Concepts, theories and practices. Lambert Academic Publishing.
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